SASKATOON – The demise of the Crow Benefit and the abandonment of prairie branch lines may not have the disastrous effect on rural Saskatchewan that many have predicted, says an agricultural economist.
Rose Olfert of the University of Saskatchewan says the loss of income from higher freight rates could be outweighed by benefits from on-farm diversification and more local processing.
“It’s not at all clear that there will be a net negative effect,” on the rural economy, she said in an interview after speaking to a grain transportation conference in Melfort.
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In fact some communities will almost certainly benefit from the transportation changes, depending on their location and whether there is other viable economic activity in the area.
The last straw
A community is always hurt when it loses its rail line, Olfert said, and in some cases it may be “the last straw” that essentially closes down a village.
But the process of abandonment and rationalization has been going on for years even with the Crow subsidy in place, which underlines that other factors are just as important in determining the future of rural towns and villages.
For example, improved highway transportation and changing consumer tastes have led many rural residents to abandon their local retail stores and do their major shopping in cities.
“That’s unrelated to the Crow and it’s a trend that has been pretty well established,” said Olfert.
Population shifts and economies of scale are also changing the face of rural Saskatchewan.
“As long as I can remember, economists have argued the Crow Benefit subsidy, although well intentioned, has been an aberration,” she said. “I guess I do believe in the long term we’ll be better off without it.”
